Inflation Calculator

This inflation calculator adjusts the purchasing power of a given amount of money for inflation based on the Consumer Price Index as reported by the Bureau of Labor Statistics (BLS) from 1913 to 2011.

The CPI attempts to measure the changes in costs for all goods and services for an average United States household.

It is not calculated back any further than 1913 because inflation was not a consistent problem until the creation of the Federal Reserve at that time.

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Dollar amount (USD):

Base year:

Result year:

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How Does Inflation Affect Savings?

Your money will be worth less in the future due to inflation. In other words, the buying power of your dollars will fall over time.

How much of an effect does inflation have on your savings? How can you counteract the affects of inflation?

The Inflation Calculator can give you some insight into how inflation would have affected an amount of money in the past. Calculate inflation under a variety of scenarios and discover the consequences – without losing any money yourself.

How Inflation Works

Inflation is an increase in the overall price of goods and services in the economy over a period of time.

In the United States, the Bureau of Labor Statistics computes the consumer price index which is used to find inflation rates. The bureau states that the consumer price index “is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.”

The prices of goods and services generally rise with time – inflation occurs – and purchasing power goes down. For example, $100 in 1970 has the same buying power as $579.29 in 2011. $100 could buy more in 1970 than $100 in 2011.

How To Counteract The Affects Of Inflation

The negative affects of inflation are widespread – no investment is safe. However, the affects of inflation on your savings can be counteracted in three main ways:

By investing your dollars – Instead of keeping your money in a simple savings account, invest in the stock market and real estate. Find investments that provide high returns while mitigating as much risk as possible.

By saving more money – Paying off debt, raising your income, and lowering your expenses are all ways to save more money. Making regular deposits into your investments will help you counteract the affects of inflation.

By accounting for the average annual inflation rate – Inflation has averaged between 3 and 4% from 1913 to 2013. Knowing this will help you account for the affects of inflation when forecasting retirement figures.

Never Forget Inflation

The goal of the Inflation Calculator is twofold. First, it helps you understand in real-world terms how historical inflation rates would have affected the purchasing power of an amount of money. Second, it should encourage you to always account for inflation when predicting future value.

Never forget the profound results inflation has on an amount of money. It matters.

Inflation Calculator Terms and Definitions

Inflation – An increase in the overall price of goods and services in the economy over a period of time.

Deflation – The downward price movement of goods and services in an economy.

Consumer Price Index – The index of prices that consumers pay for goods and services.

Dollar amount (USD) – The United States dollar amount that will be affected by inflation.

Base year – The year in which the dollar amount will be compared to a future year.

Result year – The future year to which the dollar amount of the base year will be compared.

Buying Power – The purchasing power of an amount of money has to purchase goods and services.

Disclaimer: Each calculator on this web site is believed to be accurate. However no guarantee is made to accuracy and the publisher specifically disclaims any and all liability arising from the use of this or any other calculator on this web site. Use at your own risk and verify all results with an appropriate financial professional before taking action. The information contained on this web site is the opinion of the individual authors based on their personal observation, research, and years of experience. The publisher and its authors are not registered investment advisers, attorneys, CPA’s or other financial service professionals and do not render legal, tax, accounting, investment advice or other professional services. The information offered by this web site is general education only. Because each individual’s factual situation is different the reader should seek his or her own personal adviser. Neither the author nor the publisher assumes any liability or responsibility for any errors or omissions and shall have neither liability nor responsibility to any person or entity with respect to damage caused or alleged to be caused directly or indirectly by the information contained on this site. Use at your own risk. Additionally, this website may receive financial compensation from the companies mentioned through advertising, affiliate programs or otherwise. Rates and offers from advertisers shown on this website change frequently, sometimes without notice. While we strive to maintain timely and accurate information, offer details may be out of date. Visitors should thus verify the terms of any such offers prior to participating in them. The author and its publisher disclaim responsibility for updating information and disclaim responsibility for third-party content, products, and services including when accessed through hyperlinks and/or advertisements on this site.

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